Panel set up to revive FACT

State to allow tax concessions if company remains in the public sector

The Union minister of state for fertilisers, Rehman Khan, yesterday announced a committee to work out a package for reviving the loss-making Fertilisers and Chemicals Travancore Ltd (FACT) in Kochi.

Talking to reporters here after holding discussions with Kerala chief minister A K Antony on the of revival of the public sector firm FACT, he said the committee, comprising officials from the Centre and state, would prepare the package soon.

FACT, which was under the threat of disinvestment during the previous NDA regime and was now on the verge of being referred to the Board for Industrial and Financial Reconstruction, has a total debt burden of Rs 609.2 crore.

While Khan assured that the Centre would work hard to make it a profitable unit, Antony said his government had agreed in principle to allow certain concessions on sales tax provided the Centre promises to retain FACT in the public sector.

Antony said the state had agreed to slash the sales tax on fertiliser products from the present 17.5 per cent to four per cent and land cess from Rs 2.50 crore to Rs 1.25 crore per annum.

With regard to the demand for abolishing entry tax, he said mutual agreement would be arrived at after holding discussion on the matter.

Antony, however, said the government was not in a position to change the power tariff as demanded by the Save FACT Action Committee.

It was a matter that had to be decided by the Electricity Regulatory Commission, he said, adding taking into consideration the financial crisis faced by state electricity board, it would not be possible.

State finance minister K Sankaranarayanan and industries minister P K Kunhalikutty were also present during the meeting.

FACT Employees' Union and CITU leader K Chandran Pillai said the company's debt burden of Rs 609.2 crore included the central plan loan of Rs 140 crore, loan taken from Japan's OECF and Rs 35 crore interest for the loan.

"We have asked the Centre to write off the loan portion as part of the package. With state government performing its part, FACT could be revived and run profitably in two years time," he said adding Union minister for fertiliser Ramvilas Paswan had promised that FACT would be retained in public sector itself when a delegation of Kerala MPs met him in Delhi.

The work force of FACT had come down from 10,000 to 4,300 now, he said.

Khan would be visiting the FACT plant later in the day and hold discussions with management and employees unions.